Indonesia To Introduce CBDC Concept By End Of 2022

The Central Bank of Indonesia will publish the concept of a national digital currency (CBDC) before 2022. Bloomberg reports it concerning the chairman of the department Perry Vargio.

The Bank of Indonesia is preparing to issue a digital rupee for interbank and international transfers. Now the department is working on the cybersecurity of the financial instrument.

“The digital rupee will be equivalent to fiat money and will be the only legal currency for digital transactions in Indonesia,” Vargio said.

The Central Bank intends to distribute CBDC to large banks and payment service companies, and they will cooperate with small financial institutions for retail transactions.

“This will avoid the classic problem of disintermediation , when households would prefer to conduct transactions directly through a “risk-free” central bank instead of conventional banks, especially during a crisis,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp.

For the first time, the Bank of Indonesia announced plans to issue a CBDC in 2018. In May 2021, the regulator confirmed its intention without specifying the launch date.

In November, the agency called the introduction of the digital rupee one of the ways to combat cryptocurrencies in the country. The central bank declared CBDC “a more reliable alternative.”

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